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Bitcoin dips after $126K peak; Fed easing sparks optimism

Bitcoin Price Surges and Fed Policy Changes Fuel Optimism for New All-Time Highs in Late 2024

  • Bitcoin Price reached an all-time high of $126,000 in October before sharply declining.
  • Experts expect the Federal Reserve to end quantitative tightening in December, potentially boosting Bitcoin prices.
  • Market anticipates a third interest rate cut by the Fed since September, fueling optimism among bitcoin investors.
  • Institutional interest, led by BlackRock, is seen as a key factor for future bitcoin price increases.
  • Bitcoin price predictions for December range from over $100,000 to more than $200,000 based on growing demand and potential Fed easing.

Bitcoin and cryptocurrency prices surged early in 2025 but have recently lost momentum. Bitcoin hit an all-time high of $126,000 in October but then dropped sharply amid concerns about a possible price crash.

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The Federal Reserve’s balance sheet reduction program, known as quantitative tightening, began in 2022 and lowered the Fed’s assets from about $9 trillion to $6.6 trillion. This process has reduced liquidity in the market, putting pressure on risk assets like bitcoin.

Cathie Wood, CEO of Ark Invest, stated in a November podcast that she expects quantitative tightening to end by December 1, which she described as a form of easing. She reaffirmed Ark’s long-term bitcoin price forecast of $1.5 million, citing improving liquidity conditions. At the same time, Tom Lee, chair of BitMine Immersion Technologies and CIO of Fundstrat Capital, told CNBC that bitcoin’s downtrend from mid-October will soon stop. He predicted the price could exceed $100,000 in December and possibly reach a new all-time high, noting that recoveries after declines have historically been faster than the initial fall. Lee highlighted strong market expectations that the Fed will turn dovish at its December meeting, with a nearly 90% chance of a 25 basis point interest rate cut, the third since September.

Greg Waisman, COO at Mercuryo, commented by email that bitcoin has rebounded above $90,000 amid rising hopes of a Fed rate reduction. He noted consistent buying activity on Mercuryo’s platform and acknowledged bitcoin’s growing importance as a risk market indicator. Waisman also mentioned a recent broad rally in digital assets, led by bitcoin and global tech stocks during the Thanksgiving period.

Institutional demand is another factor supporting bitcoin’s price outlook. BlackRock, the world’s largest asset manager, has played a major role in integrating bitcoin and crypto into mainstream Wall Street investing over the past two years. Joseph Raczynski, a futurist at JT Consulting & Media, said in Finder’s latest bitcoin Price Prediction survey that he expects bitcoin to exceed $151,000 in December, calling the current phase “just the beginning.” In the same survey, Ben Ritchie, managing director of Alpha Node Global, forecasted bitcoin could top $200,000 this year. He attributed this potential to bitcoin’s fixed supply, increasing institutional demand, broader acceptance as a store of value for institutions and sovereign treasuries, and anticipated Fed interest rate cuts supporting buying activity.

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